Audusd rises 0.19% amid easing inflation expectations in US and Australia

AUDUSD Analysis

Performance after Thursday
Period	Pct	Chg	Momentum
Thursday	0.19%	12.2 Pips
Week to-date	0.41%	25.9 Pips
March	2.04%	126.5 Pips

Upcoming key events (London Time)

Fri 02:00 PM USD Index of Consumer Sentiment

What happened lately

In February, the United States witnessed a notable decrease in several economic indicators. The Producer Price Index (PPI) excluding Food and Energy sectors recorded a drop to -0.1% monthly, down from January’s revised rate of 0.5%. Over a 12-month period, this metric settled at 3.4%, slipping from January’s 3.8% revision. Furthermore, the overall PPI saw no growth as it remained flat at 0%, a sharp decrease from January’s revised 0.6%. The Consumer Price Index (CPI) Inflation Rate also receded, dropping to 2.8% over 12 months from 3%, and the monthly CPI inflation settled at 0.2%, down from 0.5%. The CPI inflation rate, excluding food and energy, posted a 12-month decline to 3.1% from January’s 3.3%. Meanwhile, the February Monthly Treasury Budget Statement plummeted to -$307 billion, a stark contrast to January’s -$129 billion. However, the labor market showed resilience, as Initial Unemployment Insurance Claims slightly decreased to 220K from 221K in the week ending March 8.

Turning to Australia, the Survey of Consumer Inflationary Expectations illustrated a decline in inflation anticipation, falling to 3.6% in March from 4.6% in February. This suggests a general easing of inflationary pressures perceived by consumers, which could temper spending growth or influence future monetary policy decisions.

The recent economic data may exert downward pressure on the US Dollar against the Australian Dollar (AUDUSD). The weakening of inflation indicators in the US could prompt the Federal Reserve to adopt a more dovish stance going forward. Lower-than-expected inflation reduces the immediate need for aggressive monetary tightening, which has previously boosted the USD. In contrast, the reduced inflation expectations in Australia might not heavily impact the AUD in the short term due to other external factors, including global commodity prices and AUD sensitivity to broader market risks. Therefore, the interplay of these data may result in a moderate increase in AUDUSD, as seen with Thursday’s 0.19% rise to 0.63310. Traders are also likely to anticipate the upcoming USD Index of Consumer Sentiment for further direction.

Latest from X (Twitter)

Tweets by Australian Bureau of Statistics

What can we expect from AUDUSD today?

AUDUSD on Thursday rose 0.19% to 0.63310. Price is above 9-Day EMA while Stochastic is rising.

Updated daily direction for AUDUSD looks bullish as the pair ended higher after Thursday trading session.

Looking ahead for the day, immediate upside resistance level is R1 at 0.6336 with break above could target R2 at 0.63409 or figure level area. While towards the downside, we are looking at daily low of 0.63179 as an important support. Break below this level could weaken the current bullish momentum. A break above 0.63319 may suggest continuation after recent positive movement.

For the week to-date, take note that AUDUSD is mixed as compared to the prior week.

Key levels to watch out:

#AUDUSD Trending on Twitter

[custom-twitter-feeds hashtag=”#AUDUSD” num=3 showheader=false]